Special Needs Planning FAQ

What is a Special Needs Trust and how does it work in Florida?

Special needs trusts are planning tools for disabled individuals and their families. There are two types of special needs trust. The first is a first-party special needs trust that is set up with the beneficiary’s own funds. For instance, the beneficiary’s monies from a settlement would fund a first-party special needs trust. The other type of trust is a third-party special needs trust. This trust can be set up with funds from someone other than the beneficiary such as a parent, aunt or uncle. Once set up, the beneficiary can use the money inside of the trust to supplement government benefits. For example, the funds can go toward special equipment and medical expenses that are not currently covered. Additionally, the beneficiary can benefit from the monies since they can be used to pay for travel, recreation, and even a companion for travel.

As long as the trust is properly set up, funded, and used, the money inside of it will not impact government program eligibility. Thus, consult with our Miami special needs planning attorney to ensure that you follow all the rules and guidelines.

In Florida, a properly drafted special needs trust ensures that funds are used to enhance the beneficiary’s quality of life—covering things like therapy, education, housing, and personal care—without interfering with eligibility for public assistance.

Under Florida law, a First-Party Special Needs Trust (funded with the disabled person’s own assets) must be established by the individual, parent, grandparent, legal guardian, or the Court. A Third-Party Special Needs Trust (funded by someone else, like a parent or grandparent) can be created by anyone during their lifetime. Denise Jomarron Legal Group helps families identify the right type of trust and ensure it’s set up in compliance with both federal and state regulations.

Will a Special Needs Trust protect my child’s eligibility for Medicaid and SSI?

Yes. In Florida, when properly drafted and administered, a Special Needs Trust allows a disabled individual to continue receiving Medicaid and SSI benefits. The assets held in the trust are not counted as personal resources, so long as distributions are made in accordance with strict rules. Improper use of trust funds, however, can lead to disqualification, so it’s important to work with an experienced trustee.

What is the difference between a First-Party and a Third-Party Special Needs Trust?

A First-Party SNT is funded with the disabled person’s own assets—often from a lawsuit settlement or inheritance—and must include a Medicaid payback provision. A Third-Party SNT is funded with assets from someone else (typically family) and does not require Medicaid reimbursement after the beneficiary’s death. At Denise Jomarron Legal Group, we help families determine which trust type best fits their circumstances.

What happens to funds in a Special Needs Trust when the beneficiary passes away?

It depends on the type of trust. For First-Party SNTs, Florida law requires the trust to pay back Medicaid for benefits provided during the beneficiary’s lifetime before any remaining funds can go to heirs or to the beneficiary’s estate. In Third-Party SNTs, there is no Medicaid payback requirement, so the remaining funds can be distributed according to the terms of the trust. Our firm can help you draft a trust that ensures your loved one is protected during life and that the remaining assets are passed on as intended.